The Nifty50, as expected, climbed far above the 19,500 mark on the weekly F&O expiry day but failed to hold on to the same as bears tightened their grip over Dalal Street in late morning deals and dragged the index below the 19,400 mark on August 24. Hence, 19,500 is expected to remain crucial for bulls to get it conquered to gain strength for going ahead, whereas the support stays at 19,300-19,250 levels, experts said.
The Nifty50 opened well above 19,500, at 19,535 and climbed up to 19,584 but bears turned active in late-morning deals and gained a stronghold as the day progressed. The index hit an intraday low of 19,369 in late trade, before closing the session at 19,387, down 57 points.
The index lost nearly 200 points from the day's high and the opening upside gap has been filled completely. It formed a long bearish candlestick pattern which resembles a Bearish Engulfing kind of pattern formation on the daily timeframe (not a classical one), indicating the possibility of bear strength, but continued making higher tops formation for the fourth consecutive day and also held previous day's low.
"The crucial overhead resistance of the downsloping trendline has turned out to be a false upside breakout on Thursday. This is a negative indication and signals chances of Nifty sliding down to or break below the immediate support of 19,300-19,250 levels in the near term," Nagaraj Shetti, technical research analyst at HDFC Securities said.
However, any attempt at an upside bounce could find strong resistance around 19,550 levels, he feels.
On the Option front, after today's correction, the resistance levels shifted lower. We have seen the maximum Call open interest at 19,400 strike followed by 19,500 & 19,600 strikes with Call writing at 19,400 strike then 20,500 strike. On the Put side, the maximum open interest was at 19,400 strike followed by 19,300 strike with writing at 19,700 strike.
The above data still indicated that 19,400-19,500 is expected to be key hurdles for the Nifty on the upside, with support remaining at 19,300 in the near term.
Bank Nifty
The Bank Nifty also behaved in a similar fashion and lost 453 points from the day's high of 44,950 to close with just 17 points gains at 44,496. The index again failed to hold on to 44,500, which is expected to be crucial for further upmove towards the 45,000 mark and formed a bearish candlestick pattern with a long upper shadow on the daily charts.
"The Bank Nifty index recently encountered selling pressure from elevated levels and is now displaying indications of range-bound trading. The range of movement seems to be established between 44,000 and 45,000, a zone where substantial Put and Call writing activities are evident," Kunal Shah, senior technical & derivative analyst at LKP Securities said.
In the current scenario, he feels the index's immediate support lies at 44,200. If this support level is effectively maintained, the index could potentially experience a recovery, driving it towards levels of 44,800 and 45,000, he said.
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Technical View | Nifty loses 200 pts from day's high as bears tighten grip, 19,500 remains crucial for... - Moneycontrol
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